TechCrunch is reporting a rumor that answer community and social search tool Aarvark is considering a $30 million buyout offer from Google:
Social search service Aardvark is considering accepting a $30+ million offer by Google, say multiple sources close to the companies (one source says it’s $40 million). The company, which was founded by ex-Googlers, has raised around $6 million in venture capital to date.
The company is also talking with other potential buyers, say our sources.
Here’s the dilemma and challenge: selling to Google or another will probably take the company in a somewhat different direction than the founders envision. Dodgeball launguished under Google and Jaiku was shut down. However, this is guaranteed money and the Aardvark business model is “embryonic” at best.
Is Aardvark a service that will continue to grow and become an alternative “word of mouth” tool that people use instead of conventional search (esp. on the go)? Or is it a promising service that won’t quite live up to user expectations (which is what some are saying today). In the former scenario, Aardvark could potentially sell for much more. In the latter, $30 million would represent a good (and very quick) exit. Recall that Google early on tried to buy Friendster for $30 million.
This is obviously a tough choice and to some degree about predicting the future. The founders will need to evaluate their growth, look at how viable their intended business models are and search their gut instincts.
But investors and the “rational” decision may be to try and create a bidding war and then sell with some assurance that the new parent will allow development consistent with the founders’ vision.
Here are previous posts on Aardvark: